The present invention is generally in the field of computer software, and in particular, concerns a personal computer-based system for life insurance companies.
Several large mainframe software systems for the life insurance industry have been developed over the last twenty years. The foundation for most of these systems is IBM""s original 1962 CFO product. The first generation of products was written in AUTOCODER and was designed for a computer with 16k of memory. The second generation of products was a CFO replacement system again directly descended from the original CFO product but written mostly in ASSEMBLER language. The third generation of life insurance software was mainframe database systems. These systems were all large mainframe databases, some of which were relational, written primarily in COBOL, with most components being taken from earlier systems. The fourth generation systems are mini and PC based mainframe replacement systems. Again these systems are written in COBOL, still using the single centralized processor concept. Some are transportable between PC""s, mini-computers and mainframes.
The first through fourth generation software systems for life insurance companies still use technology with disjointed data files, outdated mainframe architecture, restrictive data formats and difficult programming languages. The deficiencies are particularly onerous in view of increased competition in the insurance industry. Competitive shifts and opportunities in the marketplace are characterized by a need for rapid, competent adjustments in product support services, compensation systems and customized administrative support. In addition, increasing government regulation and reporting have been relentless in recent years and require sophisticated computer system enhancements. Another problem is a shortage of qualified computer programers. Of even greater importance, the shorter product lead times and life cycles in the insurance industry now require products to be implemented more quickly.
In addition to these problems, the data processing departments of insurance companies are being asked to provide wider and easier access to the corporate database, in order to provide the users with the necessary data to administer products and provide prompt customer service. At the same time cost must be kept within acceptable levels.
Accordingly, it is an object of the present invention to provide an integrated system for the administration of an insurance company at a reasonable cost. This integrated system must reduce total data processing costs, reduce product implementation time frames, be easy to use and provide greater flexibility in product design and commission payment frequency and format.
The present invention is an integrated system for the administration of insurance companies. The system includes a plurality of personal computers, a network and one or more file servers. The system further includes software for performing a plurality of functions, the functions including new business processing, policy administration, correspondence, cashiering and disbursement processing, accounting, billing and payment processing, requirement processing, marketing and sales information and maintenance of all subsidiary files. Data files are provided for storing current information characterizing each of these functions. The system is written in a fifth generation language which takes advantage of PC/network distributed environments, utilizing a true relational database design. Manual entry devices such as keyboards allow entry of data relative to these functions. The program receives data and verifies its accuracy. The program then takes the entered and received data, performs the functions enumerated above and updates the data files. The system further includes various devices such as a printer, built-in fax and modems for communicating the updated information to other computers or to external printers, fax machines or other computers outside the network.
The system also provides off-site database support. This support allows a company to process data in one or more locations while maintaining a single consolidated database. This support is well suited for remote, regional processing by separate marketing organizations, or regional processing offices of the company. This support can take one of three forms: (1) selected data files are maintained in their entirety at the remote site, thus allowing both the Home Office and the remote site to view and update any records in these files; (2) a subset of selected data files are maintained at a remote site such that only the subset can be maintained by the remote site but all data including the subset can be maintained by the Home Office; or (3) a subset of selected data files at the Home Office is made available to the remote site for inquiry purposes only. Updating of the multiple data files can be done through a dedicated phone line, or on a periodic batch basis if appropriate.
An additional feature of the invention is the system for installing the program in individual insurance companies. The system comprises an interface which poses a series of questions to the user upon installation. The questions generally are of the yes or no or multiple choice variety. Based on the answers to the questions, the system is globally modified to conform to these answers. The parameters of the system are thereby modified independently or collectively as required. In a preferred embodiment the system is subdivided into four levels. The database level basically includes all information stored in the computer. The company level divides the database into information concerning a particular company or group of companies. The product line level concerns groups, such as factor based products like traditional life insurance, formula based products such as universal life and fixed annuities and equity-based products such as variable life and variable annuities. The product level is only concerned with specific products, such as a specific type of whole life insurance. By entering the required data the user can profile the parameters of the database, the number and type of companies, the relevant product lines and the specific products of the user.
The invention provides various advantages, including, but not limited to, the following:
a) Various different insurance products are supported, and can be accessed by various different insurance agents or insurance agencies.
b) A PC local area network is employed, providing distributed processing for faster speed, yet providing distributed access to a database on a file server.
c) Reverse processing is accommodated, whereby any transaction can be reversed, including reducing an agent""s commission when a transaction is reversed. A previous incorrect transaction can be reached and corrected.
d) Policy records are placed in and stay on the system from before application is submitted through while benefits are being paid.
e) Applications for insurance are submitted on line with screens that vary depending upon the insurance product. There is no need to mail an application. Paperwork is reduced, and a more environment friendly system is provided.
f) An agent hierarchy is established for each client company. The system keeps an electronic record of who an agent reports to and who reports to the agent, which hierarchy can change for different products.
g) The system can calculate commissions depending on level of the agent in the hierarchy. The frequency of making commission payments is variable. It is possible to cause a commission to be paid prior to the scheduled payment date, and the system can be instructed to advance commissions when applications are submitted.
h) The system calculates tax information, and prints a form 1099 for each agent or agency that received commission payments.
i) Information for each agent stored, and information relating to an agent can be retrieved by performing a phonetic search of the agent""s name.
j) The system provides the capability of generating a form of instructions regarding what labwork is required, and of storing lab results on-line for an underwriter to view. There is no need to mail medical results.
k) The system can be used to determine the maximum amount that can be borrowed from a policy, and to generate a loan check and letter to a policy owner who wishes to borrow against a policy.
1) A request can be made to the system to pay systematic withdrawals to a policy owner, and the system will do so. Federal and state taxes are withheld, and letter is generated by the system to accompany a check.
m) The system calculates a minimum distribution amount for tax purposes for owners of IRA""s, Terminal Funded or TSA policies, who are at least 70xc2xd years old.
n) The system generates form letters, such as a letter to a policy owner prior to maturity of the policy.
o) The system generates transaction files for transmittal to automated clearing house for premium payments.
p) The system provides mail tracking. Letters are scanned in and maintained in the system for later review on-line.